On July 26 2022 I posted on social media @AidanFX “ GBPUSD Watch for buying opportunities against 1.1962 stop loss.“
Confluence trading is a combination of two or more trading strategies/techniques that come together and form a high probability buy/sell zone in a certain area in the market. Market patterns (Elliott Waves, Harmonic, Head and Shoulders etc.), price action analysis (Support & Resistance, Supply & Demand Zones, Candlestick analysis etc.) and indicators (RSI, Moving Average, Stochastic etc.) are technical strategies/techniques used when trading a confluence setup. The charts below show a confluence trade setup that signals a trader on which side to take the trade.
BUY Trade Setup
1. Price entered the BUY ZONE/Demand Zone (Purple)
2. Bullish higher high higher low sequence
3. Bullish trend continuation divergence forms (Blue)
4. Price respects and bounces off Dynamic Support/Resistance 200 Moving Average (Light Blue)
5. Price respecting the ascending trend line support (Black)
6. Stochastic indicator in oversold levels
7. Price in the discount zone/BUY ZONE (Green Box)
8. Ascending Triangle Breakout Pattern forming and a breakout will confirm the move higher (Pink)
GBPUSD 1 Hour Chart July 27 2022
Entered the BUY trade at 1.2021 with Stop Loss at 1.1961. GBPUSD moves higher and on July 29 2022 price hits the proposed 1:3 RR target at 1.2201 from 1.2021 for +180 pips (+3% gain risking 1% on every trade)
GBPUSD 1 Hour Chart July 29 2022
A trader should always have multiple strategies all lined up before entering a trade. Never trade off one simple strategy. When multiple strategies all line up it allows a trader to see a clearer trade setup. If you followed me on social media you too could have caught the GBPUSD move higher. We at EWF never say we are always right. No market service provider can forecast markets with 100% accuracy. Only thing we at EWF 100%, is that we are RIGHT more than we are WRONG.
Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade. Hope you enjoyed this article and follow me on social media for updates and questions> @AidanFX
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